There is something, in my opinion, that we could all be taking on board from Airbnb’s new venture.
The property market is a risky business.
As Australia’s housing bubble is set to burst again, experts predict that house prices in Australia’s biggest cities will fall by 5–10% in 2018–2019, with Melbourne and Sydney most at risk.
The Property Market: A Good Investment?
The GFC pushed the US property market into a nosedive, which in turn had a flow-on effect on Australia’s economy.
And yet our housing market never experienced the kind of crash that the US and others did. This means that Australian house prices have continued to march steadily upward, making them some of the most expensive in the world.
For years, the mainstream media and popular culture in Australia have pushed the idea that house prices are immune to the laws of economics, and simply cannot fall.
But recently, more and more economists are becoming concerned that Australian property is in a bubble, and ripe for a fall.
In spite of this reality, property remains a popular and sound investment in the long term. And while property investment is not without its risks, property is often seen as a ‘stable’ option which yields better results over time.
However, it may be that 30 years of house price rises have locked many people out of the market for good.
At present, the market is overwhelmingly affected by low interest rates and a poor supply of housing, cause by an increased demand by our rising population. With our population expected to grow, foreign buying is also having an impact, with a 5–10% demand hitting the most popular areas.
It is expected that the continuing cycle of supply and demand will act as a driving force in the future market.
Young people are particularly affected by the Australian slump in housing affordability.
During the last 20 years, house prices in Sydney have gone from an average price of $233,000 to $2,000,000 — a five-fold increase. Melbourne has not fared much better, with the average price rising from $142,000 to $943,100.
At this rate, only the wealthiest will be able to afford such an investment, and this divide is contributing to a widening of the gap between rich and poor.
The slowing in Melbourne and Sydney’s property markets, and a decrease in lending to investors, will have an impact on future growth.
While property remains a long-term investment, it may be that investors are wary of the eventual fall.
To get in the know on the potential in property investment, check out our articles below.
Just like fashion always changes — some might say ‘evolves’ — so too do the way retailers sell fashion. In days gone by, it was customary for a budding designer to rent an old shop…
The fortune tellers of the financial world — economists and analysts — have been predicting calamity for property prices for quite some time now.
It seems property prices could decline as much as 20% from peak-to-trough across housing in Sydney and Melbourne, as ANZ revises it forecast.
Last week we saw property prices continue to drop across most of Australia’s mainland state capitals, but the rate of these declines were still less severe than what we have seen in recent months.
The important point NOW is that the Home Construction Index peaked in late January. Since then, it’s fallen 36% into late October. I believe this second bubble burst will be worse than the last one.
Now is the time to stay engaged in the market. It can be hard to do, when all the headlines and analysts are calling a collapse…
How far will the housing downturn go? The truth is that nobody can answer that. The main question for me is how much of the affluence you see in Australian streets is wealth, and what…
Even though Airbnb is supposed to disrupt the short-term rental market like hotels, it can also affect the long-term property rental market.
We all know Melbourne’s residential property (housing) market is falling — it’s a story we’ve been covering extensively here at Markets & Money. Today’s article will focus specifically on the Melbourne residential property market.
In what is arguably one of the most important weekends for spring sales, Melbourne’s weekend auction sales were at record-year lows.When it comes to the Australia’s housing market, it’s generally the most expensive properties that…
Right now, millennials are the largest cohort of homebuyers in the US. However, this is the number one problem real estate faces right now, right alongside being completely unaffordable…
As you can see below, many cities around the world are well overvalued when compared to incomes. Sydney property could be overvalued by 50% …Madrid by 15%…Auckland by a whopping 75%.
Our view is based purely on demographics, and it is more extreme than that: By 2024, the home ownership dream as a means to wealth will be DEAD! This is not a theory. It has…
The buying frenzy is gone. Owners are expecting to sell at last year´s prices, yet prices have dropped since. Prices and clearance rates are plummeting in Sydney and Melbourne. Will the downtrend continue?